Onward: How Starbucks Fought for Its Life Without Losing Its Soul

by Howard Schultz

  As I did my own reflecting on the power of the week, a word I'd not consciously thought of for what seemed a long while came to mind. “Love.” I've always loved this company. Love is why I had come back as ceo and why I feel so personally responsible for its failure and success. Yet somewhere along our journey, the love our people had for Starbucks had blurred. New Orleans had brought it back into focus, and once again our values stood in stark relief. I felt confident that thousands of others also loved what we had built, and because of everything we experienced in New Orleans, it was apparent to all of us what it meant to love something—and the responsibility that goes with it.

  Chapter 24

  Nimble

  Someone tapped Terry Davenport on the shoulder before plopping a MacBook on his lap.

  “Watch this,” said David Lubars, the chief creative officer of our advertising agency, BBDO.

  Terry was sitting in the front of one of the buses that was taking Starbucks’ partners from the conference's general session back to their hotels. David stood in the aisle of the moving bus and pushed “play” on the computer. Terry waited. First he heard delicate, almost primitive piano music. Then on the screen, against a subdued burlap background, dark green words in clean capital letters popped up one at a time to form a question, then another. There was no talking in the video. Just piano music and two questions:

  WHAT IF WE ALL CARED ENOUGH TO VOTE?

  NOT JUST 54% OF US,

  BUT 100% OF US?

  It was less than one week before the 2008 presidential election in the United States, and the race had been historic. Former first lady and senator Hillary Rodham Clinton had narrowly lost the Democratic primary to the first African-American presidential candidate, a senator from the state of Illinois, Barack Obama. And in five days, on November 4, 2008, Americans would go to the polls and vote for either Senator Obama and his running mate, Senator Joe Biden, or for Republican presidential candidate Senator John McCain and his unexpected running mate, the governor from the state of Alaska, Sarah Palin. Yet despite the importance of this election, only slightly more than half—54 percent—of Americans were expected to show up at the polls to vote.

  As the bus rolled down the streets of New Orleans, Terry watched the commercial, intrigued as more green words and questions danced on the screen, sometimes pushing each other aside, to the dramatic piano notes that seemed to crescendo with each silent question:

  WHAT IF WE CARED AS MUCH ON NOV. 5TH

  AS WE CARE ON NOV. 4TH?

  WHAT IF WE CARED ALL OF THE TIME

  THE WAY WE CARE SOME OF THE TIME?

  WHAT IF WE CARED WHEN IT WAS INCONVENIENT

  AS MUCH AS WE CARE WHEN IT'S CONVENIENT?

  WOULD YOUR COMMUNITY BE A BETTER PLACE?

  WOULD OUR COUNTRY BE A BETTER PLACE?

  WOULD OUR WORLD BE A BETTER PLACE?

  WE THINK SO, TOO.

  IF YOU CARE ENOUGH TO VOTE,

  WE CARE ENOUGH TO GIVE YOU

  A FREE CUP OF COFFEE.

  COME INTO STARBUCKS ON NOV. 4TH

  TELL US YOU VOTED,

  AND WE'LL PROUDLY GIVE YOU

  A TALL CUP OF BREWED COFFEE ON US.

  With David hovering over his shoulder, Terry watched the last words crop up on the screen:

  YOU & STARBUCKS.

  IT'S BIGGER THAN COFFEE.

  The 60-second ad was, Terry knew immediately, brilliant.

  Simple. Quiet. Smart. Emotional. The spot was unlike anything he'd seen on television, at least recently given that the airwaves seemed dominated by political pundits screaming over each other. Yet it was relevant to this particular moment in time. The ad worked because it was not about Starbucks, but rather about what Starbucks is about, especially just coming out of New Orleans: community and personal responsibility.

  “We have to do this,” said Terry.

  BBDO was barely two weeks into its role as Starbucks’ new advertising agency of record, and half a dozen of the firm's people were in New Orleans with us, including Jeff Mordos, BBDO's wise and personable chief operating officer. No one at Starbucks was expecting the agency to deliver anything yet, just to watch and listen. But the idea for an election-themed ad had struck David before coming to New Orleans, and after being incredibly moved by what he witnessed, he had asked his creative team to pull something together. Quickly.

  When I first saw the spot, I agreed that Starbucks had to run it. The ad felt pitch-perfect, and I also thought it would make our store partners proud. I shared the ad with Norman Lear, the revered television writer and producer who is also a good friend and had joined me in New Orleans. Norman, whose taste I trust implicitly, also thought it was dead-on.

  If we could pull this off, the commercial would be only the second time Starbucks advertised on television.

  If.

  If our marketing and public relations teams could rally instead of resting once we all returned to Seattle after a successful but exhausting week.

  If we could secure the right commercial time slots and maximize its exposure.

  If we could afford it.

  If we could get the word out to customers and coordinate our store partners.

  And if we had enough coffee to handle traffic overflow.

  We had four days to figure it all out.

  I have never embraced traditional advertising for Starbucks. Unlike most consumer brands that are built with hundreds of millions of dollars spent on marketing, our success had been won with millions of daily interactions. Starbucks is the quintessential experiential brand—what happens between our customers and partners inside our stores—and that had defined us for three decades. But it was no longer enough.

  I've known David Lubars for a very long time, and he understood, perhaps better than other marketing professionals, my avoidance of traditional advertising. We'd last worked together in Starbucks’ earlier days, and David had taken the top job at BBDO in 2004 and was being hailed as one of the most out-of-the-box thinkers on Madison Avenue. He'd been the conceptual mind behind the groundbreaking minifilms for BMW as well as innovative campaigns for Apple, HBO, and FedEx. In September 2008, Starbucks had parted ways, somewhat painfully, with our primary advertising agency of four years, Portland, Oregon-based Wieden+Kennedy. I have great respect for Dan Wieden, who coined the Nike tagline “Just Do It” as well as developing other iconic campaigns. Dan is undoubtedly one of advertising's greatest professionals, and I was sorry to see the relationship end. In the following months, several other agencies, including BBDO, pitched to win our business, and in October I reunited with David for a spontaneous meeting in San Francisco. Jeff Mordos also joined us.

  Over coffee, I discussed my change of heart about the role advertising could play for Starbucks, expanding on what our marketing team had already told BBDO. For the first time in Starbucks’ history, outside forces were defining us. That very fall a McDonald's billboard campaign had declared, “Four bucks is dumb” on a sign not far from our Seattle support center. Yet we were silent. It infuriated me. “We have got to get on the offensive,” I said. “Not on the attack. But pro-actively define ourselves, find our voice, and express the personality of the company.”

  While I was ready to talk seriously about how Starbucks should use advertising, I was not interested in a traditional client-agency relationship. Instead of looking to an agency for answers, Starbucks needed a partner open to creative debate and tension, with whom we could have an ongoing dialogue, free of time-consuming formalities, to help us problem solve.

  “We're being squeezed from the bottom by fast-food brands like McDonald's and Dunkin’ Donuts, and from the top by high-end independent coffee shops,” I explained. “We have to make certain that we don't get caught in the middle.”

  If Starbucks were to establish such a relationship with BBDO, we wanted to avoid the type of bureaucratic agency-client dynamics that can suck creativity out of the process. After we selected BBDO, I insisted that David be closely involved with Starbuck
s, especially during the transformation, because I so highly valued his sensibilities. David vowed to make us a top priority.

  Before our conversation in San Francisco ended, I changed the subject, telling David and Jeff about a highly secretive project that, if BBDO joined our team, they would work on come 2009. I slid my hand into my bag and pulled out a skinny little foil sleeve about the length and size of an index finger whose contents, I told them, would reinvent the coffee category as well as propel Starbucks’ growth. But that was a discussion for another day.

  After Terry awarded BBDO our business, he and I invited David, Jeff, and their team to the New Orleans leadership conference, the ideal venue for absorbing our culture and values. BBDO's ability to come up with such a fresh, brand-relevant idea so quickly and share it with us so freely—followed up with their enthusiasm to do whatever was necessary to polish the spot in short order—was further proof that BBDO was the right partner for Starbucks at this transitional time.

  I was also taken by my own team's gut enthusiasm. After seeing the ad, we could have gotten bogged down in details and multiple opinions and potential roadblocks. Instead, we went for it. We acted nimbly, a telling sign that we had effectively dusted off our entrepreneurial spirit.

  “We don't want to invite the country to a party and run out of coffee,” cautioned Terry early Friday morning back in Seattle. He had just shown the spot to Michelle, and they were strategizing our next move.

  They had already reached out to Peter in SCO as well as the coffee team, asking them to run scenarios and see whether our US stores would have enough coffee and supplies for a free-coffee campaign. Meanwhile, Cliff was calling his direct reports in the field to survey if they thought our thousands of stores could pull it off. To their credit, our regional managers supported the idea, agreeing to do their best to make it happen. Once we felt comfortable that our company-operated stores would have enough coffee on hand—our licensed stores would not participate—we gave BBDO the go-ahead to produce the television spot.

  Perhaps the first and biggest coup was securing prime television time. For that, the stars aligned. The general consensus was that we should pack a punch and run the ad only once before Election Day, during a high-profile TV program. We targeted Saturday Night Live. That season, the late-night sketch comedy show was garnering record numbers of viewers thanks to its political satire, primarily comedian Tina Fey's popular impersonation of Governor Palin. SNL's skits were generating significant watercooler chatter, and the talk-currency extended itself to ads that ran during the 90-minute show, especially during the first half. The weekend before the national election, SNL's audience was sure to be huge, and while our ad's neutral election theme seemed a natural fit with what SNL was calling its “Election Bash” show, securing coveted commercial space could be tricky at such a late date.

  To help us, Norman Lear and Phil Griffin, the newly named president of business-news network MSNBC, graciously reached out to their contacts while BBDO's media partner, PHD, began to orchestrate a buy with NBC for a price that, while it was more money than Starbucks had ever spent on a single ad placement, was not astronomical. Not until Saturday evening would we know exactly when during SNL our election ad would appear.

  Again, the stars aligned. Just after 11:30 p.m. eastern time, after a hilarious opening sketch featuring Tina Fey as Sarah Palin and the real Senator McCain hawking election memorabilia on the home-shopping network QVC, our ad's now-familiar piano music played and the Starbucks commercial that had been brought to life on a bus in New Orleans four days earlier was the very first commercial to air.

  WHAT IF WE CARED ALL OF THE TIME

  THE WAY WE CARE SOME OF THE TIME?

  Watching it at home with Sheri was almost surreal.

  SNL was the highest rated of all the late-night and prime-time programs that evening, and the show got the second-highest household rating it had received in nearly 11 years.

  Starbucks, however, was not done, and immediately after the ad aired, our digital team put into play a plan they'd been working on nonstop for the last 36 hours.

  A torrent of digital and social media activity would amplify the 60-second spot, which ran only one time on television. We updated our home page (which could not yet host videos) to direct people to YouTube, where, right after the SNL spot aired, we posted the commercial so it could be watched endlessly by anyone. Next, we e-mailed information about Tuesday's free-coffee event to all Starbucks registered cardholders, whose e-mail addresses we had in our database. We also tapped Twitter. In August, our digital team had begun using Twitter as another channel to authentically connect with customers, and with little fanfare or cumbersome strategizing, a former barista turned product manager, Brad Nelson, began tweeting on behalf of Starbucks. Now, he was alerting thousands of his followers that they may want to visit YouTube, vote on Tuesday, and get their free cup of coffee.

  The election campaign's main engine, however, was Facebook, the number-one social networking site. Several Starbucks fans had already established their own Starbucks pages, but our company had only recently established its own official presence. The election campaign was our opportunity to elevate it. Despite the time challenge, we jumped on it. Working with Facebook, we created a Starbucks page and negotiated an ad buy: For the next few days, one of two Starbucks ads would be among the first five ads anyone logging on to Facebook would see. One ad was the actual election commercial. The other online ad invited people to come to a Starbucks after they voted and asked them (in a first for Facebook) to RSVP by clicking “yes,” “maybe,” or “no.”

  Every time someone clicked a response or watched the actual video, the action triggered a message to his or her Facebook news feed. For example, some of Chris Bruzzo's Facebook friends were notified that he'd RSVP'd “yes” to Starbucks’ free coffee day, exposing his entire network to Starbucks’ election campaign. This secondhand or “viral” exposure added 14 million more individual impressions on top of the 75 million original impressions Facebook yielded, meaning that, all told, 89 million people were exposed to the election campaign in some way. Starbucks placed additional, more traditional ads on other media websites, but Facebook fueled the widespread exposure.

  After months of watching others promulgate negative buzz about Starbucks online, it was empowering to finally be the source of so much positive buzz.

  Now all Starbucks had to do was deliver in the stores.

  Truly, we did not know what would happen on Election Day.

  Our store operations teams did everything they could under the circumstances to increase coffee stock and prepare our partners. After I voted that morning, I visited various stores. They were bustling, a hint of esprit de corps definitely prevailed, and throughout the day I got word that volunteers at polling places around the country were actually reminding voters to get their free coffee after casting their ballots.

  The confluence of the beautifully conceived and executed commercial, the SNL spot, the digital marketing, and the resulting news coverage sparked conversation and store traffic. On that seminal day, Starbucks was so much more than a source of great, free coffee. We were a communal gathering place, which was, after all, what we'd set out to be.

  Of course we hit inevitable bumps. Some stores ran out of pastries. The increased traffic put an additional burden on our already hardworking baristas. And while many of our partners felt proud and had fun with the spirit of the campaign, the sudden, intense influx of customers in some stores strained our staff.

  Controversy also found us. According to rumors, the election campaign was Starbucks’ attempt to influence how people voted. Then claims surfaced that our free-coffee promotion violated federal and some state election laws because it promised an incentive in return for voting. To avoid any legal tussles, we again turned on a dime and extended the free-coffee offer to any customer who requested it. Unfortunately, word of the shift often got to customers before our partners, and at times confusion reigned.

 
; But overall the election campaign succeeded on several levels. Starbucks’ US stores served more than two million cups of coffee that day, at least two and a half times more than on a typical weekday. More significantly, beyond the traffic and additional pastry sales, a sense of community enveloped the stores. For partners, pride in the company's intentions trumped pockets of inconvenience and chaos.

  Operationally, the harried experience reminded us that Starbucks could act nimbly and not be grounded by our size or leashed to bad habits. I think we were all stunned, given the relatively low cost of the entire campaign, at the sheer magnitude of the audience we reached. On YouTube, the ad was viewed 419,000 times, making it the fourth-most-viewed video on Election Day. On Facebook, 405,000 people replied “yes” or “maybe” to our invitation. On Twitter, someone, not just Brad, was tweeting about Starbucks every eight seconds. We also reaped 70 million impressions via traditional print, broadcast, and online news outlets that covered the Starbucks campaign in some form.